Thoughts, links, inside information and program previews from the host of Chicagoland's premier local-access political talk show.

Tuesday, March 22, 2005

Giangreco v. Berkowitz, on TV, Round 1

Pete Giangreco: See, that’s the thing, Jeff. You gotta look at the bottom line. This [personal retirement account] plan, at its heart, and you agreed with this the other day, does nothing to make the plan more solvent.

Jeff Berkowitz: No, I didn’t agree with that…

Giangreco: Tell me how it does. I will give you 30 seconds.

Berkowitz: Thank you...************************************This week’s suburban edition of “Public Affairs,” features Pete Giangreco, a Democratic Campaign consultant and partner at the Strategy Group [www.strategygroup.com]. Pistol Pete has worked on six Presidential campaigns and helped elect Governor Mark Warner in Virginia, Senator Barack Obama and Gov. Blagojevich in Illinois, and Pete currently does political message work for Illinois’ Governor and will no doubt work on Hot Rod's re-election campaign.

See the end of this blog entry for a detailed "Public Affairs," suburban airing schedule. The show with Pete Giangreco will also air throughout the City of Chicago [in the regular “Public Affairs,” City of Chicago time slot] on next Monday night, March 28 at 8:30 pm on Cable Ch. 21 [CANTV]. **********************************************A partial transcript of the show with Giangreco is included, below.**********************************************Pete Giangreco debates and discusses with show host and Executive Legal Recruiter Jeff Berkowitz whether the national Democratic Party is “out of touch,” the Democratic Presidential possibilities of Senator Barack Obama [D-IL], Governor Mark Warner [D-Va], Governor Rod Blagojevich [D-IL], John Edwards, Senators John Kerry [D-MA], Hillary Clinton [D-NY] and Even Bayh [D-IN]; social security lockbockes, personal retirement accounts, insolvency and reform; the War in Iraq; Gov. Rod Blagojevich’s efforts to deal with the deficit and much, much more. ******************************* Pete Giangreco: What would you say to the people who don’t opt for privatized [personal retirement] accounts? Yet, they are going to have their benefits cut by 40%. What are they going to—

Jeff Berkowitz: Well, they’re not. You are talking about changing—

Giangreco: No, No, No. That’s a fact.

Berkowitz: Excuse me. There is a change in indexing that people are talking about--

Giangreco: No, they are going to get their benefits cut—

Berkowitz: Irrespective [of what is done regarding personal retirement accounts]. That 40% thing is such a pile of bunk. Because what you are talking about--

Giangreco: It’s a fact. It’s the only way—

Berkowitz: Explain to the people [watching this]. Explain to the people what you are talking about: a change from a wage index to a price index [that is used to adjust benefits upward to take account of inflation].

Giangreco: Right now, if you are under 55, your benefits could be cut up to 40%.

Berkowitz: They could be cut irrespective of this [proposed change to personal accounts]. We have an index now that is inappropriate. It escalates benefits at too high a rate [more than the relevant rate of inflation]. We are talking about a change that would make it more appropriate and you’re saying that—

Giangreco: Could I finish?

Berkowitz: Yes, you may.

Giangreco: The only way they get any savings out of this is to cut the benefits by up to 40%. So, for those who opt out, they can try to see if they can game the market and try to beat the 40% that they are losing. Most people won’t, by the way, because under their historical gains in the stock market—you don’t make enough over time. Time value of money. You are better off having money in your hand. A bird in the hand is always worth more than two in the bush [Pun intended?]. And that is the problem with this problem. On top of that, the two trillion dollars in debt and the debt service alone—there is no chance for most people to come out ahead. And, if you don’t want a risk, you don’t have the option—you still get a guaranteed benefit [risk?].

Berkowitz: If the negatives [about personal retirement accounts] are so strong, the Democrats should have the faith to be willing to sit down at the table and try to persuade people who differ with them in the marketplace of ideas

Giangreco: We are, and we are—

Berkowitz: But you are saying, the Democrats are saying, We can’t sit down [until the Republicans take personal retirement accounts off the table]—you know it’s like the North Koreans saying, “I won’t come to this table unless you give us this.” You are adopting the North Korean approach. Sit down at the table and discuss it.

Giangreco: I would say that the President’s approach is sort of like those who said the only way to save the village is to kill it, is to burn it down. And, we won’t—

Berkowitz: More than half—

Giangreco: See, that’s the thing, Jeff. You gotta look at the bottom line. This plan, at its heart, and you agreed with this the other day, does nothing to make the plan more solvent.

Berkowitz: No, I didn’t agree with that. [some] people say that. Because if you allow people—

Giangreco: Tell me how it does. I will give you 30 seconds.

Berkowitz: Thank you. You know, if you have—Right now, total taxes going into this program, employee and employer [of social security are] about 12.2% [of salary, up to the first $90,000 of annual income]. The proposal is to take a third of that-4% of that salary that is currently being taxed and going into social security and give individuals [some] control [over the investment of those funds], and if they can earn, as historically people have [in the stock market] at least 3 or 4 % [per year], perhaps higher—

Giangreco: Um, um.

Berkowitz: Currently they are only getting [the equivalent of] 1.3 %. They may say, "well I will tell you what, we will split the difference [between 1.3 % and 4 %]." Some of that [higher rate of return] will go to them directly and some of that will go to assist others [or to pay for the transition costs]. So, to the extent that there is an insolvency issue, that’s addressing some of the insolvency issue.

Giangreco: And, the way they paper it over is to borrow two trillion dollars, isn’t it?

Berkowitz: Well, you are borrowing—Eventually, you are trying to shift away from a program that is a Ponzi scheme to one that is much more based on investment and savings and productivity and that allows people to exercise some choice [on how their social security taxes are invested].

Giangreco: But they don’t exercise choice. They can’t control the money—

Berkowitz: Well, we are going to continue to speak as the credits roll, but I very much want to thank our guest, Pete Giangreco [Partner at the Strategy Group, www.strategygroup.com].

Giangreco: It’s been fun, as always.

Berkowitz: …the theme of this program was—“Are the Democrats out of touch?”

Giangreco: No, because—

Berkowitz: Let me throw out a topic—[First there was the focus on] National Security, then there was the War, then the whole effort for democracy, then the whole effort for peace. I am not saying that the Democrats don’t want the President to be successful. I am not saying that the Democrats are not being patriotic. But, when you hear them, you get the impression that the Democratic Party [thinks it] would be better off if the President were to fail at these various initiatives. And when he starts to succeed, in a sense the Democrats aren’t too happy about that. The American people will be plenty happy if these initiatives succeed. We have had elections in Iraq. We have had peace break out in Israel and Palestine. We have had elections and democracy break out in Ukraine. Would you give the President some credit for this wave of [democracy]--

Giangreco: Now that we are stuck in Iraq, we have to see it through. I think the argument was why [go to war] there when both the Secretary of Defense and the Secretary of State, Bush’s people, thought there was no connection to Al Qaeda for 9-11.

Berkowitz: Not all Democrats are saying that. [show concludes]. ******************************************* Pete Giangreco, Democratic Campaign Consultant, recorded on March 13, 2005 and as is airing on the Suburban edition of Public Affairs tonight and this week [week of March 21] and on the City of Chicago edition of Public Affairs on Monday night, March 28 at 8:30 pm on Cable Ch. 21[CANTV]. See directly below, for a detailed suburban airing schedule. ******************************* The suburban edition of "Public Affairs," is regularly broadcast every Monday, Wednesday and Friday at 8:30 pm on Comcast Cable Channel 19 in Bannockburn, Deerfield, Ft. Sheridan, Glencoe, Highland Park, Highwood, Kenilworth, Lincolnshire, Riverwoods and Winnetka.